George H. Richards - Page 18

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          not substantiated any expenses except for tolls of $24, which we            
          allow as a deductible expense.                                              
               Accordingly, except with respect to the $24 deduction for              
          tolls, petitioner has failed to substantiate these deductions,              
          and they are denied.                                                        
                    B.  Depreciation and Section 179 Expense                          
               A taxpayer may elect to deduct as a current expense the cost           
          of any “section 179 property” which is acquired by purchase for             
          use in the active conduct of a trade or business.  Sec. 179(a),             
          (d)(1).  Section 179 property is tangible property to which                 
          section 168 applies and which is section 1245 property.7  Sec.              
          179(d)(1); sec. 1.179-4(a), Income Tax Regs.                                
               Computer equipment is “listed property” under section                  
          274(d)(4), as defined under section 280F(d)(4)(A)(iv), unless it            
          falls under the exception in section 280F(d)(4)(B).  Computer               
          equipment is excepted from the definition of listed property                
          under section 274 (and will, therefore, not be subject to the               
          substantiation requirements for listed property under section 274           
          and section 1.274-5T(b)(6), Temporary Income Tax Regs., supra) if           
          it is used exclusively at a regular business establishment and              
          owned or leased by the person operating such establishment.  Sec.           
          280F(d)(4)(B).  A regular business establishment includes a home            

               7  Sec. 1245 property is defined in sec. 1245(a)(3) as                 
          property subject to the allowance for depreciation under sec.               
          167, including personal property.                                           

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